Latest / Best of Business / Jarrod Kerr: Kiwibank economist predicts OCR will be reduced come November

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Jarrod Kerr: Kiwibank economist predicts OCR will be reduced come November · Best of Business

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  Speaker 1: You're listening to a podcast from News Talk SEDB. Follow
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• 0:17
  Speaker 1: Heather Duple see Alan.
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  Speaker 2: If you've got a mortgage, maybe there's a little bit
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  Speaker 2: light at the end of the tunnel. The Reserve Bank
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  Speaker 2: has left the official cash rate unchanged today, but economists
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  Speaker 2: reckon his tone has become softer. Jared Kerr is key
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  Speaker 2: we Bank's chief economist and with us Now, Hey, Jared, Hi, right,
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  Speaker 2: So are you expecting a cut November? Still?
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  Speaker 3: Yep. We're sticking with that forecast, and the commentary that
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  Speaker 3: we saw out of the Reserve Bank today suggests that
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  Speaker 3: are opening the door to a rate cut earlier than
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  Speaker 3: they had expected.
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  Speaker 2: Do they still sound to you? I mean, they're saying
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  Speaker 2: that the inflation is going to be within the target
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  Speaker 2: band of one to three this half of the year,
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  Speaker 2: which is bringing it forward slightly, but it's still lingering
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  Speaker 2: concerns about sticky inflation.
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  Speaker 3: Yeah, there is, but I think they had to acknowledge
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  Speaker 3: the collapse and business confidence we saw last week, and
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  Speaker 3: we've got very weak household confidence at recessionary levels, and
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  Speaker 3: we've been in a recession for a year and a half.
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  Speaker 3: So you know enough enough it's time to turn the
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  Speaker 3: tide and start lowering rates.
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  Speaker 2: Do you think, then, okay, that the data that we've got,
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  Speaker 2: so of all the data that we've got between now
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  Speaker 2: and let's say November, what is it that we need
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  Speaker 2: to be looking at to be seeing whether it does
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  Speaker 2: happen in November?
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  Speaker 3: I think everything comes out in inflation, the next inflation report,
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  Speaker 3: I'm not that interested in. It's the third quarter, the
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  Speaker 3: September quarter inflation report that comes out mid October that
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  Speaker 3: has us excited because we forecast inflation will be below
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  Speaker 3: three percent then and that'll open the door for a
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  Speaker 3: cut in November.
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  Speaker 2: Good stuff, Jared, so right down to the wire. I
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  Speaker 2: appreciate it. There's Jared Kirky, we Banks, Chief Economist.
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